Embraer and Boeing heading for merger

Boeing and Embraer have confirmed they are in talks for a “potential combination”, following a Wall Street Journal report that Boeing is in discussions to take over the Brazilian airframer.

The deal that would involve a relatively large premium for Embraer, which had a market value of about $3.7 billion Thursday morning, according to people familiar with the matter. The deal would give Boeing a new presence in the regional jet market, following Airbus’ plan announced in October to acquire a majority stake in the Bombardier CSeries programme. If Boeing can get Brazil’s blessing to buy Embraer, it would give Boeing more options in the highly competitive narrow-body market, with China and Russian Federation both set to unveil new jets in that space as soon as 2019.

Boeing and Embraer already work on projects including runway safety and alternative jet fuels.